Use the following information for the Exercises 3-7 below. (Algo) [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 275 units from the January 30 purchase, 5 units from the January 20 purchase, and 25 units from beginning inventory. Date January 1 January 10 January 201 January 25 January 30 Activities Beginning inventory Sales Purchase Sales Purchase Totals Units Acquired at Cost 175 units @ $10.00- 130 units @ 275 units @ 580 units $9.00 = $7.00 = $1,750 1,170 1,925 $4,845 Units sold at Retail 135 units 140 units 275 units Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1 Assume the perpetual inventory system is used. Required: 1. Compute gross profit for the month of January for Laker Company for the four inventory methods. 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest gross profit? @ $ 19.00 @ $19.00
Use the following information for the Exercises 3-7 below. (Algo) [The following information applies to the questions displayed below.] Laker Company reported the following January purchases and sales data for its only product. For specific identification, ending inventory consists of 275 units from the January 30 purchase, 5 units from the January 20 purchase, and 25 units from beginning inventory. Date January 1 January 10 January 201 January 25 January 30 Activities Beginning inventory Sales Purchase Sales Purchase Totals Units Acquired at Cost 175 units @ $10.00- 130 units @ 275 units @ 580 units $9.00 = $7.00 = $1,750 1,170 1,925 $4,845 Units sold at Retail 135 units 140 units 275 units Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1 Assume the perpetual inventory system is used. Required: 1. Compute gross profit for the month of January for Laker Company for the four inventory methods. 2. Which method yields the highest gross profit? 3. Does gross profit using weighted average fall between that using FIFO and LIFO? 4. If costs were rising instead of falling, which method would yield the highest gross profit? @ $ 19.00 @ $19.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Topic Video
Question
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Subject :- Accounting
![Use the following information for the Exercises 3-7 below. (Algo)
[The following information applies to the questions displayed below.]
Laker Company reported the following January purchases and sales data for its only product. For specific identification,
ending inventory consists of 275 units from the January 30 purchase, 5 units from the January 20 purchase, and 25 units
from beginning inventory.
Date
January 1
January 101
January 20
January 25
January 30
Activities
Beginning inventory
Sales
Purchase
Sales
Purchase
Totals
Req 1
3. Does gross profit using weighted average fall between that using FIFO and LIFO?
4. If costs were rising instead of falling, which method would yield the highest gross profit?
Sales
Cost of goods sold
Gross profit
Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1
Assume the perpetual inventory system is used.
Required:
Complete this question by entering your answers in the tabs below.
1. Compute gross profit for the month of January for Laker Company for the four inventory methods.
2. Which method yields the highest gross profit?
Units Acquired at Cost
175 units @ $ 10.00= $ 1,750
130 units @
$ 9.00-
1,170
$7.00 =
1,925
$ 4,845
$
275 units @
580 units
LAKER COMPANY
For Month Ended January 31
Weighted
Average
Specific
Identification
Req 2 to 4
Compute gross profit for the month of January for Laker Company for the four inventory methods.
Note: Round cost per unit to 2 decimal places and final answers to the nearest whole dollars.
0 $
<1
0 $
FIFO
0 $
Units sold at Retail
LIFO
135 units
140 units
0
275 units
Reg 2 to 4 >
@
$ 19.00
$ 19.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F83b62d92-ae46-4dd3-8277-7ec31e6fe3f8%2F42c10117-d5eb-4c1e-800e-84f8131f2b90%2Fo2q7pir_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Use the following information for the Exercises 3-7 below. (Algo)
[The following information applies to the questions displayed below.]
Laker Company reported the following January purchases and sales data for its only product. For specific identification,
ending inventory consists of 275 units from the January 30 purchase, 5 units from the January 20 purchase, and 25 units
from beginning inventory.
Date
January 1
January 101
January 20
January 25
January 30
Activities
Beginning inventory
Sales
Purchase
Sales
Purchase
Totals
Req 1
3. Does gross profit using weighted average fall between that using FIFO and LIFO?
4. If costs were rising instead of falling, which method would yield the highest gross profit?
Sales
Cost of goods sold
Gross profit
Exercise 5-5 (Algo) Perpetual: Gross profit effects of inventory methods LO A1
Assume the perpetual inventory system is used.
Required:
Complete this question by entering your answers in the tabs below.
1. Compute gross profit for the month of January for Laker Company for the four inventory methods.
2. Which method yields the highest gross profit?
Units Acquired at Cost
175 units @ $ 10.00= $ 1,750
130 units @
$ 9.00-
1,170
$7.00 =
1,925
$ 4,845
$
275 units @
580 units
LAKER COMPANY
For Month Ended January 31
Weighted
Average
Specific
Identification
Req 2 to 4
Compute gross profit for the month of January for Laker Company for the four inventory methods.
Note: Round cost per unit to 2 decimal places and final answers to the nearest whole dollars.
0 $
<1
0 $
FIFO
0 $
Units sold at Retail
LIFO
135 units
140 units
0
275 units
Reg 2 to 4 >
@
$ 19.00
$ 19.00
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